Role of fiscal and monetary policies for economic recovery in China

Yunxian, Wang; Wang, Xin; Zhang, Zheng; Cui, Zhanmin

doi:10.1016/j.eap.2022.10.011

Cited by 21 publications

(10 citation statements)

References 59 publications

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“…Quantitative tools have a more significant direct effect, stimulating consumption and investment for immediate economic growth. On the other hand, price-based tools have a more stable controllability and are better suited for addressing deleveraging and risk prevention (Galati & Moessner, 2018;Wang et al, 2023). Accordingly, the paper recommends that the central bank flexibly employ reverse repurchase operations in the open market to stimulate the short-term recovery of a weak economy.…”

Section: Discussionmentioning

confidence: 99%

Monetary Policy and Deleveraging of Microfinance Institutions in China: A Dynamic Threshold Approach

Li,

Mohd Ashhari,

Hisyam Ab Razak

et al. 2024

IJARBSS

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By constructing the dynamic panel model and dynamic threshold model, this paper empirically analyzes the direct impact of monetary policy transmission on deleveraging initiatives of 204 microfinance institutions (MFIs) in China from 2012 to 2021, and the interactive effects of different monetary policy tools. The empirical investigations find that: the quantitative monetary policy transmission directs a negative impact on MFIs' deleveraging, while the direct macro-control of price-based monetary policy tool is not significant. When two monetary policy tools interact, the inhibitory effect of quantitative monetary policy on MFIs' deleveraging weakens once the price-based monetary policy tightening exceeds the threshold. Additionally, as the endogenous money multiplier amplifies the actual money quantity, price-based monetary policy starts to play its role in stable controllability, and MFIs gradually accept market-oriented interest rate mechanisms to adjust their deleveraging initiatives. The findings herein contribute to the significant implications of the study. The central bank should characterize the quantity control of quantitative monetary policy and the structural control of price-based monetary policy to formulate a scientific monetary policy. By improving the market-oriented interest rate mechanism of microfinance and coordinating with macroprudential regulations, it could achieve micro-prudential guidance on MFIs' deleveraging progress, as well accelerate economic transition and structural leverage adjustment.

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Section: Discussionmentioning

confidence: 99%

Monetary Policy and Deleveraging of Microfinance Institutions in China: A Dynamic Threshold Approach

Li,

Mohd Ashhari,

Hisyam Ab Razak

et al. 2024

IJARBSS

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“…Most previous studies on shock response have shown that supportive policies implemented by governments, such as commonly used fiscal and monetary policies, have played a positive role in regional economic recovery (Eggertsson, 2008;Mishkin, 2009). Among them, the support policies implemented by the government to respond to shocks may be single, non-coherent, or a comprehensive package (Hepburn et al, 2020), and appropriate policy combinations can enhance policy sustainability and the effectiveness of economic recovery (Brainard, 1967;Wang et al, 2023). Due to the ongoing COVID-19 pandemic, the economic effects of supporting policies in various regions have not yet been fully revealed.…”

Section: Evaluating the Economic Impact Of Supporting Policies During...mentioning

confidence: 99%

Impact of Government Support Policies on Regional Economic Resilience Under the Covid-19 Outbreak

Fan,

Weng,

Tian

2024

Technological and Economic Development of Economy

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Using the policy package pilot implemented in Hubei Province, China, in April 2020 as a natural experiment, we use the synthetic control (SC) and synthetic difference in differences (SDID) methods to estimate the impact of the Chinese government’s support policy on the economic resilience and to analyze the mechanisms by which it impacts. This study finds that the policy package has contributed to the growth of economic resilience in the pilot provinces, with the policy package increasing the average economic resilience of the pilot provinces by 0.062 compared to their potential resilience. The validity and robustness of the above conclusions are objectively confirmed by multidimensional quantitative outcomes such as placebo tests, ranking tests, and replacements in calculating resilience. The mechanism analysis shows that the investment in real estate development, the stimulus for consumption, and the core industry development are virtual channels for the policy package to promote economic resilience growth in the pilot provinces. Moreover, traditional investment in transportation fixed assets plays a minor role. This paper quantitatively corroborates the academic idea that government governance capacity affects regional economic resilience (RER), and research can provide empirical support for regional economic recovery and policy support under a major crisis.

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“…This can include green bonds, green banks, and green investment funds (Zhang et al 2023 ). Third, they can set up policy frameworks that encourage green investments and punish practices that are not sustainable (Wang et al 2023a , b ). This can be done by putting a price on carbon, giving money to renewable energy, or making rules that support the principles of a circular economy.…”

Section: Literature Reviewmentioning

confidence: 99%

“…It could help create jobs, reduce greenhouse gas emissions, make the environment more sustainable, and unite people. But there are also some problems with putting it into action, such as money, political will, and capacity (Wang et al 2023a , b ). To promote a green economic recovery, governments can take several policy steps, such as giving green investments top priority, setting up green finance mechanisms, and putting policy frameworks that encourage green investments in place (Dey 2023 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Financial stability influence on climate risk, GHG emission, and green economic recovery of China

Liu

2023

Environ Sci Pollut Res

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This study examines the nexus between financial stability, climate risks, GHG emission mitigation, and green economic recovery of China. Financing efforts to protect against and reduce the hazards associated with climate change need to consider these risks and resources. Study used the Kalman technique of analysis for empirical inference. This research focuses on the carbon risk in China by employing a Kalman estimation approach. Although environmental mitigation was found to be important at 39%, financial strength and carbon hazards were considerable at 34%. Moreover, the report demonstrates the relationship between climatic threats and environmental drift in China, at a rate of 17%, emphasizing the need to address climate change issues. A state’s fiscal health guarantees national economic security while pursuing green economic recovery initiatives. Researchers concluded that precise policy suggestions were needed to promote green economic development.

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Role of fiscal and monetary policies for economic recovery in China

Cited by 21 publications

References 59 publications

Monetary Policy and Deleveraging of Microfinance Institutions in China: A Dynamic Threshold Approach

Monetary Policy and Deleveraging of Microfinance Institutions in China: A Dynamic Threshold Approach

Impact of Government Support Policies on Regional Economic Resilience Under the Covid-19 Outbreak

Financial stability influence on climate risk, GHG emission, and green economic recovery of China

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